MyEconLab HW#2
Population = 295295 million Labor force = 162162 million The number of people employed = 147.4147.4 million The number of people unemployed = 14.614.6 million What is the unemployment rate?
14.6/162 * 100 = 9%
When the economy was expanding in early 2007, fewer than _______ percent of the unemployed had been jobless for more than 6 months.
20%
Population = 235235 million Working-age population = 128128 million Labor force = 9494 million The number of people employed = 8888 million The number of people unemployed = 66 million The labor force participation rate for this economy is?
94/128 * 100 = 73.4%
The working-age population in Concordia was estimated to be 6.5 million in a certain year. The country's labor department announced that the total number of unemployed people in the country had gone up to 460,000 during this year while, the total number of people out of the labor force decreased to 2,000,000. Oscar Lewis, a student of labor economics believes that the labor department data is flawed. Which of the following, if true, would strengthen the argument that the data understates unemployment? A. Five percent of the country's labor force consists of legal immigrants with work permits. B. Skilled workers who were forced to shift to part-time jobs because of an economic downturn are also considered employed. C. The labor bureau in Concordia does not consider full-time students or retirees as people in the labor force. D. Businesses in the country often complain about labor shortage, whether skilled or unskilled. E. The country has high income taxes, but an inefficient tax payment monitoring system.
B. Skilled workers who were forced to shift to part-time jobs because of an economic downturn are also considered employed.
The price index which is used to measure changes in the cost of living is the
Consumer Price Index (CPI).
the government has been unable to bring down the unemployment rate in the country. Which of the following, if true, best explains this outcome? The number of students who enroll for higher education is decreasing every year. B. The per capita income of the people in Concordia has been increasing over the years. C. Most educated people prefer job options in Concordia compared to opportunities available elsewhere. D. The government implemented a generous welfare plan 3 years ago to support people who cannot find work. E. During this period, the country's government reduced the limits on foreign direct investment in key sectors.
D. The government implemented a generous welfare plan 3 years ago to support people who cannot find work.
Briefly explain whether you agree or disagree with the following statement: "I don't believe the government price statistics. The CPI LOADING... for 2014 was 215215, but I know that the inflation rate LOADING... couldn't have been as high as 115115 percent in 2014."
Disagree. The inflation rate is the percentage increase in the price level from the previous year, not the base year.
Which one of the following is not a measure of the price level?
Government Price Index: an average of the prices paid by the government for goods and services used only by different government agencies.
Which of the following, if true, would strengthen the argument for increasing minimum wages?
Increases in the minimum wage are observed to reduce employee turnover.
Why is the unemployment rate, as measured by the Bureau of Labor Statistics, an imperfect measure of the extent of joblessness in the economy?
It does not account for inaccurate responses to the Current Population Survey. Underemployed people are considered employed. Discouraged workers are not considered unemployed. It fails to account for illegal activities.
The BLS uses the establishment survey to collect information on employment in the economy. Indicate one drawback of the establishment survey compared to the current population survey and indicate one advantage.
It is based on company payroll and not on unverifiable answers. It does not include information about self-employed people.
Which of the following best describes a current trend in the labor force participation rate in terms of percent of men and women
It is decreasing for men and increasing for women.
What does the employment population ratio measure?
Measures the percentage of the working age population that is employed
During an economic expansion, we would normally expect the employment-population ratio to increase as the unemployment rate falls because
More people are likely to be employed
How do you calculate the unemployment rate?
Number of unemployed/Labor Force *100
Which one of the following accurately describes the relationship between frictional unemployment and job search?
People are said to be frictionally unemployed when they are between jobs and searching for new jobs.
What are some problems in measuring the unemployment rate?
People on active military service are included as unemployed
How is the labor force participation rate calculated?
Percent of people in the Labor Force/Working-age population * 100
What effect do labor unions have on the unemployment rate?
Since few non-government workers are unionized, there is no significant effect on the unemployment rate.
Bob Wesley believes that structural unemployment should be eliminated in order for an economy to be healthy. In making this argument, which of the following relevant issues is he ignoring?
Structural unemployment will exist in an economy that is innovative.
What is the difference between the consumer price index and the producer price index?
The consumer price index is an average of the prices of the goods and services purchased by the typical urban family of four, whereas the producer price index is an average of the prices received by producers of goods and services at all stages of the production process.
When employment rises, the labor force participation rate and the employment-population ratio will both increase because
The denominators (working age pop) are the same and employment is included in both of the numerators.
Relative to the household survey, which of the following is a strength of the establishment survey?
The establishment survey is determined by actual payrolls, rather than by the unverified answers of the household survey.
____ is the percentage of the working-age population in the labor force.
The labor force participation rate
What would happen to the unemployment rate and the Labor Force Participation rate if homemakers were included in these numbers?
The unemployment rate would decrease and the labor force participation rate would increase
How would it affect the unemployment rate if the Bureau of Labor Statistics counted as unemployed both (1) discouraged workers and (2) people who work part-time but would prefer to work full-time?
The unemployment rate would increase.
Does the unemployment rate understate or overstate the true degree of joblessness when an unemployed person drops out of the labor force?
Understates because the number of people in the labor force will decrease will the number of employed will stay the same
Is it possible for the employment to population ratio to increase while the labor force participation rate stays the same?
Yes
Suppose that you are available to go to work but have not looked for a job for at least the last four weeks because you believe that there aren't any jobs available. You would be counted as
a discouraged worker.
How does the U.S. economy create and destroy millions of jobs each year? (Mark all that apply.) a) In the market system, new firms are constantly entering and exiting various industries. b) When unemployment is high, the federal government hires more workers to offset the effects of unemployment. c) Some businesses are expanding, while others are contracting. d) The federal government determines that certain industries are obsolete and closes firms.
a) In the market system, new firms are constantly entering and exiting various industries. c) Some businesses are expanding, while others are contracting.
When an unemployed person drops out of the labor force, it a) does not affect the employment-population ratio b) does not affect the unemployment rate c) does not affect the labor force participation rate d) affects the employment-population ratio
a) does not affect the employment-population ratio
Even if they don't find a job right away, people entering the job market after graduating from high school or college will be counted or not be counted as part of the labor force and why?
be counted as part of the labor force by the BLS if they are actively looking for work.
The increase in labor turnover and the increases in entry-level wages being paid by large retailers are
connected because higher wages can encourage workers to stay longer, thereby lowering turnover rates.
Which of the following is not one of the conditions someone needs to meet to be counted as unemployed? a) They were available for work in the week previous to the survey b) The must not have worked in the week previous to the survey c) They had actively looked for work at some time during the previous four weeks d) They had worked only one hour per week during the previous four weeks
d) They had worked only one hour per week during the previous four weeks
As output (GDP) is increasing, the amount of cyclical unemployment would
decrease
If the employment-to-population ratio increased while the labor force participation remained largely unchanged, it is because any increase in
employment would have been offset by a fall in unemployment.
What is the formula for employment-population ratio
employment/working-age population * 100
Most economists agree that the above-market wage paid in unionized industries significantly increases the unemployment rate in the United States.
false
A person who is in between jobs but actively engaged in a job search is considered to be ____ Experts in hand-drawn animation who remain unemployed due to the film industry's switch to computer-generated animation are considered to be ____ When a company reduces production and employment during economic recessions, those employees who lose their jobs are generally considered to be ____ Unemployment caused by an increase in job quits would be classified as
frictional structural cyclical frictional
Consider the effect of each of the following on the unemployment rate: a. The minimum wage law b. The effect of labor unions on overall unemployment is ____ since only a ____ percentage of the labor force outside the government is unionized. c. An efficiency wage
has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage. small small increases the unemployment rate since firms pay a higher-than-market wage that increases the quantity of labor supplied.
labor turnover
labor turnover is a separation of an employee from an establishment. Separations may be voluntary (quits), involuntary (layoffs, discharges), or other (retirements, death, disability).
Workers leave the job market because of retirement, to care for children or aging parents, to pursue more education, or out of discouragement. Millions of others jump in after graduating. Are they counted or not counted as unemployed? And why?
not counted as unemployed in the BLS data because they are no longer actively looking for work.
When compared to the Great Depression, the typical length of unemployment in the modern (post-Great Depression-era) U.S. economy is
relatively brief
The unemployment rate
shows the percentage of the labor force that is considered unemployed.
Given a table with products, quantity, and price per year, calculate the annual rate of inflation for 2016 as measured by the CPI 3 Products quantities are: 1,9,2 99 price: 10,2,15 '15 price: 11,2.45,15 '16 price: 16.20,2.40,14
spending 1999: 10+18+30 = 58 spending 2015: 11+9*2.45+30 = 63.05 spending 2016: 16.20+9*2.40+28 = 65.8 CPI 2015: (63.05/58) * 100 = 108.706 CPI 2016: (65.8/63.05) * 100 = 104.362 ((108.706-104.362)/108.706)*100 = -3.9964 ——> 4%
The type of unemployment most likely to result in hardship for the people who are unemployed is
structural because this type of unemployment requires retraining to acquire new job skills.
Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called
structural unemployment.
Creating a goal of zero percent unemployment for an economy is not feasible nor is it desirable because
the economy needs some short-term unemployment in order to allow for better matching of jobs with workers that possess the proper skill sets.
When the economy is at full employment, unemployment is equal to
the natural rate of unemployment.
A state's unemployment rate could have increased at the same time that employment in the state was increasing because
the number of discouraged workers and other people not previously counted as unemploymed enter the labor force. While searching for jobs these people are classified as unemployed.
The unemployment rate in the United States typically has been lower than the unemployment rates in Canada and countries in Western Europe because
the opportunity cost of job search is lower in Canada and countries of Western Europe and unemployed workers in those countries search longer for jobs.
During the recovery from the 2007-2009 recession, the employment-population ratio did not increase as much as it might have been expected to because
the recovery was sluggish and employment did not expand as rapidly.
The natural rate of unemployment is
the sum of structural unemployment and frictional unemployment.
Working-age pop = 245.9 million labor force = 155.5 million not in the labor force = 90.4 million employed (144.2 million) unemployed (11.3 million) not available for work (84.1 million) available for work (6.3 million) discouraged workers (0.9 million) not working other reasons (5.4 million). What's the unemployment rate and the labor force participation rate?
the unemployment rate is 11.3/155.5 *100 = 7.3% the labor force participation rate is 155.5/245.9 *100 = 63.2%
When the economy is at full employment
the unemployment rate is greater than zero. all remaining unemployment is either frictional or structural. the natural rate of unemployment prevails.
When there are part-time workers, the official BLS measures of the unemployment rate _____ the true degree of unemployment
understates
correct formula for calculating the unemployment rate?
unemployed/LF * 100
Eliminating all frictional unemployment will
will not be good for the economy since the presence of frictional unemployment increases economic efficiency.
The four types of unemployment are
frictional, seasonal, structural, and cyclical